[DEBATE] : Pondo villagers appeal against Xolobeni

[Berend Schuitema]

Posted to the web on: 13 October 2008
The Wild Coast’s mine of questions

AN APPEAL by Pondo villagers against Australian miner MRC’s licence to start strip mining the Wild Coast provides a test case of whether the new African National Congress (ANC) really cares if local communities benefit from mineral exploitation of their land. 

One of the most pernicious legacies of colonialism was the extractive economies it left. Turning Africa into a labour camp for exploiting raw materials did create jobs and infrastructure. It also left economies hostage to seesawing international commodity prices, which can suddenly impoverish millions and lead to violent conflict.

It has therefore become clear to African leaders that diversifying their economies and processing raw materials locally are crucial for peace and prosperity. But governments must realise this doesn’t always improve the lives of people suffering the consequences of living on mineral rich land. 

I’m not suggesting that every villager should become an instant millionaire. Mining is a costly business, and investors willing to risk their money deserve returns. But as the conflict-torn Niger Delta demonstrates, there will never be stability unless those worst affected by the extraction of resources get a fairer slice of the pie. 

This is the nub of the Wild Coast controversy. The villagers who lodged the appeal will lose grazing and cropland, some will be relocated, and those who stay must live with 40-ton trucks trundling past their homes every hour, every day, for 22 years. 

When I visited the area many told me they’d endure these indignities if they knew their lives would improve. But few are convinced — and with good reason. 

“Their mistake was they didn’t involve the people directly affected,” said traditional leader Lunga Baleni. “We were given no opportunity to agree or disagree.” 

PROMISES that mining revenues worth tens of millions will be disbursed every year through local empowerment company Xolco, which will buy a 26% state in the project for R135m, ring hollow. It’s unclear if anyone will see a cent. 

MRC’s CEO Mark Caruso said last year that 60% of Xolco’s dividend stream would go towards paying its debt and the remainder to the community. But there’s no evidence to support Xolco’s claims that it is legally bound to cede revenue to community trusts, that trustees are legitimately elected and must appoint its directors, or that procurement contracts and at least 300 jobs will be reserved for locals. I spent a year asking Xolco and MRC for supporting documents and have given up believing them.

Xolco is probably paying way too much for its stake anyway. Two years ago respected heavy metals miner Ehlobo was only willing to cough up R46m for a 50% stake in this project and a much smaller titanium deposit on the Western Cape coast.

Yet the project has strong backing from ANC district mayor and newly elected national executive committee member Zoleka Capa. She told me the mine would bring jobs, schools, housing, electricity, water and roads. Sounds suspiciously like the extractive infrastructure that blights our continent. Anyway, as a Bizana resident wrote to a newspaper recently, why should these people be forced to live on a mine dump to get access to basic services?

Perhaps not coincidentally, the mine will also benefit former ANC mayor Zamile Qunya, a close associate of Capa’s who apparently still calls the shots with councillors, and owns several catering, construction and transport companies in the area. Qunya also happens to be a founding member of Xolco. 

Minerals and Energy Minister Buyelwa Sonjica recently postponed the execution of MRC’s licence until she can speak to legitimate local leaders, including Baleni. Let’s hope she also demands proof of local benefits before rubber stamping approvals. If not, expect a repeat of the Niger Delta on our doorsteps.

  Hofstatter is contributing editor.

 

http://www.businessday.co.za/articles/dailymailer.aspx?ID=BD4A861911